SaaS Valuation
The process of determining the fair market value of a software-as-a-service business.
SaaS valuation determines what a software subscription business is worth. The most common method uses a revenue multiple applied to ARR or MRR. Typical multiples range from 3-8x ARR for bootstrapped SaaS and 10-30x+ for venture-backed with strong growth. Key factors that increase multiples: low churn, high net revenue retention, strong growth rate, large TAM, and diversified customer base. On Enterpricr, our Craftr AI can estimate your SaaS valuation using these factors automatically.
Related Terms
Revenue Multiple
A multiplier applied to revenue to estimate business value (e.g., 3x annual revenue).
MRR (Monthly Recurring Revenue)
The predictable revenue a business earns every month from active subscriptions.
ARR (Annual Recurring Revenue)
The annualized value of recurring subscription revenue, calculated as MRR x 12.
Churn Rate
The percentage of customers or revenue lost over a given period.